Duck and Cover has more from the courtrooms, where lawyers from Interplay and Bethesda continue to fight over whether Interplay still retains the rights to make a Fallout MMORPG, or whether they have failed to live up to the conditions that would allow them to do so. Word is Bethesda has filed what's called a motion in limine, saying a source tells them "Bethesda is trying to prevent Interplay from bringing damning evidence up in the jury trial." Here's the legalese:

For the reasons set forth in the accompanying memorandum, Bethesda moves the Court for an order:

(1) Holding that Defendant/Counter-Plaintiff Interplay Entertainment Corp. (“Interplay”) bears the burden of proof at trial on each of the following issues: (a) that Interplay has a trademark and copyright license; (b) that Interplay had commenced “full-scale development of its FALLOUT MMOG” by April 4, 2009 as set forth in Section 2.3 of the Trademark License Agreement entered into by Bethesda and Interplay on April 4, 2007 (the “TLA”); and (c) that Interplay had “secured financing for the FALLOUT MMOG in an amount no less than US$30,000,000.00” by April 4, 2009 as set forth in Section 2.3 of the TLA;

(2) Precluding Interplay from offering parol evidence to support its defense that the TLA granted Interplay a copyright license;

(3) Precluding Interplay from arguing at trial that it had satisfied the “full-scale development” and “Minimum Financing” requirements set forth in Section 2.3 of the TLA by April 4, 2009; and

(4) Precluding Interplay from amending its pleadings to assert the affirmative defense of mistake.

<<<<<<<<<<<<<<<<<<<<<<<< "More Fallout Online Legal News Nov 8, 2011, 06:41 Dev"A full-scale development team could burn through 30M in 4 years... so it makes sense they're almost out of cash if they followed the legal guidelines.But not if you follow the filings such as annual reports. Show me where it says they got $30 million in funding.

I'll tell you what it says etc......">>>>>>>>>>>>>>>>>>>

They have a few outs. Masthead, via the contract that is sealed before the court, supplies them with sub-contract development work equal to a certain amount. A letter of intent with I2G games supplies the rest of the money when it is needed for launch.

But there are more important matters that go before that. This is a bad faith contract and Bethesda is to blame for that by arguing Interplay has the right to only the name Fallout which automatically disqualifies Interplay from ever releasing a Fallout MMO that adheres to Bethesda's stipulation that it resembles the Fallout world.

Also Bethesda Lawyers prohibited Interplay from putting out press releases stating that they were working on a Fallout MMO as far back as March of 2008.

This is another no no. It's called Sabotage. Interplay had the right to work on the game and not provide proof of 30 million up until the deadline.

Putting out a press release stating they were working on the game would have attracted many more investors in the plan( besides the one European multi-billion asset hedge fund)

Interplay is a public company that can tap the capital markets provided they are allowed to say they are working on a game that a contract says they have a right to work on. a game that ties in to a game franchise that just had blockbuster 600 million $ in sales total reported.

Investors would pony up lots of money to get in on a ground floor opportunity like that.

Bethesda lawyers threats and muzzling of Interplay denied all of these possibilities and created the very financial uncertainty for Interplay that they are bringing up as a point in court.

It's like trading for a Basketball player then nullifying the contract since the player did not pass his physical because he was beaten up to injury status by your thugs on his way to the physical.

Bethesda put stumbling blocks before them and they are detailed in court evidence long before the April 2009 put up or shut up funding and full scale development deadline.

This contract is no longer binding because it is clear as day that it is a fraudulent contract and again, Bethesda is the company that made it into a fraud by showing their bad faith contracting intent as a court argument signed and sealed before a judge.

They cannot redact that fact that they never intended to honor an Interplay Fallout MMO release. A contract violating intent was their freaking argument in court!

Bethesda's argument is so retarded and paradoxical that is smacks of collusion.

Not saying it is but really? this is all they could come up with?

Their arguments that it is a Fallout in name only game( which would never allow a sign off for publishing by Interplay) is actually a major if not the critical breach of the contract!

Do they even know what they are doing?

I predicted this before but never thought that they would actually do it to this level:

I said that Bethesda would actually argue a case that hangs them by their own noose and they are f'in doing it! How cool is that!!!!!!

Bad faith contracting, major breaches, redacting and recreating history, arguing for proof and then requesting the disallowing of presenting such proof.

It all smacks of a put up job by Bethesda who for all intents and purposes could have been buying up Interplay shares in the open market at rock bottom prices and then announce a settlement which skyrockets Interplay and which allows Bethesda to make more money from the stock than from collecting on the 12&% MMO royalties, all for the relatively tiny payment to lawyers!

Brilliant. They could even buy a stake in Interplay which would be another catalyst to sky it and cause the stake to be that much more valuable than a game's 50 million $ profit.

Other than this feasible but somewhat outlandishly smart scenario, what Bethesda's lawyers are doing makes absolutely no sense.

You can't just sign an contract with a company saying they can develop a Fallout world MMO game( if they do it in time based on meeting requirements or basically release it generic without Fallout elements if they don't) and then come back years later and argue that no, you only had the right to use the name Fallout but based on the way we structured the agreement to authorize you to publish the MMO, you can never meet the requirements that it adheres to the Fallout world because you are no longer allowed to use the Fallout World because our Lawyers think they've discovered Dark Matter that can allow us to interpret a contract the way we see fit and leave out parts that don't fit into our Dark Matter continuum.

Bethesda is off its rocker if the Judge doesn't suddenly just stop proceedings at trial, takes the contract and tears it up right there even before the Jury has had time to digest let alone deliberate over this lunacy!

Never mind the fact that winning the lawsuit guarantees no MMO for Bethesda until 4 yrs after winning an Interplay appeal which means mid 2016 the earliest.

Why? Their COO is on record stating that he believe it takes 4 yrs to make an MMO. If they dare release a secretly created Fallout MMO before then, he is guilty of perjury and the case is reopened.

Their lawyer first said no to a question by the judge of is Bethesda secretly making Fallout MMO.

Then he backtracked and said He doesn't think so, then he said he does not know.

Well, that right there is bullshit. It's not an ABC or D for all of the above answer. It gives hint to what Bethesda is risking:

Multi tens of millions illegally( contract negating illegality) developing an MMO that cannot see the light of day or else they negotiated a fraudulent contract by licensing Interplay a Fallout MMO that they were simultaneously developing.

A lot of Bethesda's legal action on the Fallout MMO has to do with the fact that Bethesda wants to protect the good name of Fallout.

A reason for their contract negotiations on the Fallout IP buyout was to ensure that Interplay was really going to give this MMO the full funding that any other big name MMO was given on the outset. Looking at the posts below it looks like this never happened, and Bethesda really DOES need to get the rights for this otherwise all the work that they've done for Fallout recently (Fallout 3 and New Vegas, both great games IMO; flaws and all) will be for naught. All the people that would possibly have tried a shoddy Fallout MMO would associate that with Bethesda's work in the IP and that simply can't stand.

Fibrocyte wrote on Nov 8, 2011, 04:54:A full-scale development team could burn through 30M in 4 years... so it makes sense they're almost out of cash if they followed the legal guidelines.

But not if you follow the filings such as annual reports. Show me where it says they got $30 million in funding.

I'll tell you what it says.

a) It says they can't get anyone to loan them money and that they are having trouble getting funding.

b) It says they had income of 3 million for 2006, 6 million for 2007, lost 500 thousand for 2008, lost 1.5 million for 2009, lost 1 million for 2010. Hilariously it says the income is mostly from sale of back titles (aka selling fallout 1&2 on steam kinda thing).

c) Product development is specifically laid out as costing $514,000 in 2010, and $279,000 in 2009, and $328,000 in 2008, and a huge $18,000 in 2007. Product development is specifically mentioned as being for the fallout MMO. In what freaking universe is this full scale MMO development? That's enough for what, 6 employees? 10 if they are working dirt cheap? A total of $1 million in your specified 4 years? Not only is it nowhere close to any sort of MMO except a flash game on facebook, its not even close to the $30 million they are supposed to get.

This is a company that brings in a few million from back catalog sales and doesn't even spend most of it on the fallout MMO (which is the ONLY thing that has a prayer of saving them).

All beth has to do is bring this public information to the court, and show them, and its obvious they didn't do full scale development and didn't get the required funding.

As of December 31, 2010, we had a working capital deficit of approximately $2,877,000, and our cash balance was approximately $3,000. We cannot continue to fund our current operations without obtaining additional financing or income.

That's their current state.

You have to dig (they moved the info out of the annual reports into the proxy statement, probably to try and hide it), but you can find out that Herve Caen up through 2009 was making half a million (his annual salary was more than they spent in any one year on fallout MMO development) and thats only his base salary, not any options. Sad. And then when they finally did reduce his salary, he was still making more than they spent on fallout MMO in 2009. Even more sad? Someone named Eric Caen was hired as president for $120,000 salary right around the time of his salary reduction. I'm betting his brother or some such. There are NO other executive officers in the company. Just the Caens, still milking the corpse dry.

Oh and BTW, in case you say the funding is not in the annual reports:

We do not have any off-balance sheet arrangements

Note: Since interplay's webpage has been offline a while, you can google for financials if you care to read them yourself, or check here:Text for your Link

Edit: And to all those saying "but ZOMG interplay deserves to make a fallout again!"... first off, there's almost NO ONE at interplay still who worked on the original. Secondly, they are NOT even making this one! They sub contracted it out to a "MMO studio" in Bulgaria named Masthead, that has exactly 1 title to their name... which is coincidentally a post apocalyptic subscription based MMO called Earthrise. One where one of the best reviews gave it a 5.5 ! And that was from an MMO fan site. Is that the kinda company you REALLY want making fallout MMO? Makes one wonder if interplay was able to cut a deal with them to just do a conversion with a reskin of their existing game for next to nothing.

There are a couple using the assets of Fallout 2 (you do have to have it installed I believe, as it obviously wouldn't be legal to offer everything in the download). It's still extremely unpolished and pretty much entirely PvP focused though.

Beelzebud wrote on Nov 7, 2011, 22:55:I think Bethesda signed this deal in bad faith, never intending to honor it, assuming Interplay wouldn't get an investor.

Well, Interplay found an investor, and now it just looks like Bethesda is attempting to bleed them out in lawyer fees. It's all very slimy. This is the same legal team suing Mojang over the word "Scrolls"...

Except they haven't found an investor because Interplay's recent filings have shown that they're all but completely out of cash and they make numerous references to their uncertainly of their ability to continue as a going concern. In other words, they're worried they can't survive. If they can barely afford to keep the lights on, where do you think they're going to get the $30M they promised in writing to get to develop a Fallout MMO? Bethesda/ZeniMax isn't the most spotless company in the world I'll admit but Herve Caen is a crook who ran Interplay and Titus into the ground and left hundreds of employees and investors holding the bag at the end while he kept drawing a salary and fled to the US to avoid the French tax man. I can't imagine why anyone would be on his side here.

A full-scale development team could burn through 30M in 4 years... so it makes sense they're almost out of cash if they followed the legal guidelines.

WyldKat wrote on Nov 8, 2011, 02:14:Yep. SOE and Bioware didn't pay anywhere NEAR $50 million COMBINED for the Star Wars IP for their respective MMOs either.

I would add that a smart Interplay would have negotiated some cut of MMO income and been happy they don't have to actually risk anything. Instead greedy Interplay is going to be bankrupt. Welcome to capitalism.

Good point! They could have even looked at the draft proposal of beth's contract for the royalty idea and said "you know what? We'll go ahead and let you have it for an extra $5 million, but you gotta give us 12% royalties on the MMO like you were thinking for your contract." Then interplay coulda used the steady income to stay alive, and beth would have done the MMO years ago. But no, they had to insist on an CRAZY $50 million.

WyldKat wrote on Nov 8, 2011, 02:14:Yep. SOE and Bioware didn't pay anywhere NEAR $50 million COMBINED for the Star Wars IP for their respective MMOs either.

I would add that a smart Interplay would have negotiated some cut of MMO income and been happy they don't have to actually risk anything. Instead greedy Interplay is going to be bankrupt. Welcome to capitalism.

Dev wrote on Nov 8, 2011, 00:03:As for the bad faith, why in the world would they do that? Beth stands to get 12% royalties per the contract even IF interplay does an MMO, and thats with no risk and no work. Why in the world would they be unhappy if interplay got some investors and got off their butts and did a game and starting kicking them some free money?

Bethesda wants 100% of the Fallout money. They wanted the MMO rights, but they didn't want to pay for them. So they thought they could get them by default with the "must be in development clause." Then they starting throwing lawsuits at interplay, interplay escalated and both sides are now trying to make sure the other side loses all rights.

Anyone (including beth) would have been INSANE to pay interplay's $50 million asking price for the MMO rights of a failing franchise (at the time of purchase remember that interplay had done its best to drive the fallout franchise into the ground) that greedy interplay was demanding. A modern AAA MMO can take $100+ million to develop, and thats not including any costs to purchase the IP.

Beth made the smart move and paid the $6 million for all rights except MMO, and made the smart move of setting a condition that a failing and bankrupt company like interplay would have to go full on develop the MMO to keep it.

Dev wrote on Nov 8, 2011, 00:03:As for the bad faith, why in the world would they do that? Beth stands to get 12% royalties per the contract even IF interplay does an MMO, and thats with no risk and no work. Why in the world would they be unhappy if interplay got some investors and got off their butts and did a game and starting kicking them some free money?

Bethesda wants 100% of the Fallout money. They wanted the MMO rights, but they didn't want to pay for them. So they thought they could get them by default with the "must be in development clause." Then they starting throwing lawsuits at interplay, interplay escalated and both sides are now trying to make sure the other side loses all rights.

Sepharo wrote on Nov 7, 2011, 22:40:That's great and all but I think I'll wait for the resident lawyer here to tell us what this means.

Would like to know on this as well - have an interest in contract law, but I'm an economist with a BA in Public Law... my knowledge of contract law is, sadly, limited.

All I can really speak to myself is point (4), which seems a bit assertive, but not out of the ordinary. Mistake would be something that you would think Interplay would be putting into their response to the lawsuit to begin with as an affirmative defense while they tried to assemble a more complete defense... adding it in now smacks of desperation (and would likely make Bethesda, once the jury trial starts, attempt to move for summary judgment and squash Interplay's case once and for all).

Beelzebud wrote on Nov 7, 2011, 22:55:I think Bethesda signed this deal in bad faith, never intending to honor it, assuming Interplay wouldn't get an investor.

Well, Interplay found an investor, and now it just looks like Bethesda is attempting to bleed them out in lawyer fees.

The deal said they had to have $30 million by 2 years ago. So it doesn't matter if they have an investor NOW or not, just if they had one THEN.

I doubt they had one at all now or then. Easy enough to read the financials, I don't recall them saying they had $30 million in funding at anytime in the past few years.

As for the bad faith, why in the world would they do that? Beth stands to get 12% royalties per the contract even IF interplay does an MMO, and thats with no risk and no work. Why in the world would they be unhappy if interplay got some investors and got off their butts and did a game and starting kicking them some free money?

Parallax Abstraction wrote on Nov 7, 2011, 23:36:Bethesda/ZeniMax isn't the most spotless company in the world I'll admit but Herve Caen is a crook who ran Interplay and Titus into the ground and left hundreds of employees and investors holding the bag at the end while he kept drawing a salary and fled to the US to avoid the French tax man. I can't imagine why anyone would be on his side here.

^ This. After FO 1&2 they screwed the fallout franchise into the ground (such as the crappy console only fallout title) and fired all of black island, etc, before beth bought it out.

Beelzebud wrote on Nov 7, 2011, 22:55:I think Bethesda signed this deal in bad faith, never intending to honor it, assuming Interplay wouldn't get an investor.

Well, Interplay found an investor, and now it just looks like Bethesda is attempting to bleed them out in lawyer fees. It's all very slimy. This is the same legal team suing Mojang over the word "Scrolls"...

Except they haven't found an investor because Interplay's recent filings have shown that they're all but completely out of cash and they make numerous references to their uncertainly of their ability to continue as a going concern. In other words, they're worried they can't survive. If they can barely afford to keep the lights on, where do you think they're going to get the $30M they promised in writing to get to develop a Fallout MMO? Bethesda/ZeniMax isn't the most spotless company in the world I'll admit but Herve Caen is a crook who ran Interplay and Titus into the ground and left hundreds of employees and investors holding the bag at the end while he kept drawing a salary and fled to the US to avoid the French tax man. I can't imagine why anyone would be on his side here.

I think Bethesda signed this deal in bad faith, never intending to honor it, assuming Interplay wouldn't get an investor.

Well, Interplay found an investor, and now it just looks like Bethesda is attempting to bleed them out in lawyer fees. It's all very slimy. This is the same legal team suing Mojang over the word "Scrolls"...